State budget problems expected to worsen today as revenue panel meets

In a spring that already has brought Louisiana an environmental catastrophe in the Gulf of Mexico, a historic budget crisis and the untimely demise of the LSU baseball team, things are about to get worse. Possibly, much worse.

Times-Picayune archiveLouisiana State Capitol

Today at noon, the Revenue Estimating Conference -- a four-member panel made up of Commissioner of Administration Angele Davis, House Speaker Jim Tucker, Senate President Joel Chaisson II, and LSU economist Jim Richardson -- will meet for the third time since April.

If things go as expected, the panel will review the state's shaky revenue picture and decide that the current-year budget deficit is even deeper than the $319 million figure that it agreed to in mid-April. With income tax collections coming in well below earlier forecast and economic uncertainty from the oil spill, the panel also is expected to downgrade the 2010-11 budget forecast, adding to the $245 million shortfall that Senate budget writers are grappling with.

The exact amount is yet to be determined, but estimates from the last time the REC met, in late May, suggest the current-year deficit could grow by as much as $100 million.

When the new revenue projections are certified, it also will mark the third time that the current year forecast has been revised downward, the first time such a thing has happened since the state brought some discipline to its budget forecasting two decades ago.

Coming barely a week before the Legislature adjourns for the year, the new estimate adds an extra layer of uncertainty as House and Senate leaders scramble to craft a spending plan for the 2010-11 fiscal year while patching up the current budget with various one-time revenues.

Once the revenue picture is finalized, the end-game negotiations between the House and Senate can officially get underway. The battle lines, by now, are familiar: House leaders believe Louisiana has a spending problem and want to cut as much as possible to get prepared for the 2011 election-year "cliff," when the federal stimulus dollars that are propping things up will be gone.

Senators, meanwhile, appear far more concerned about mitigating draconian cuts to health care and higher education that could lead to the closure of charity hospitals, and possibly some college campuses. Meeting late Thursday, the Senate Finance Committee called health care and higher education leaders back for a second round of questioning, pressing them on the kinds of changes that would be required if the House version of the budget is allowed to stand.

The news they heard wasn't unexpected, nor was it pretty.

Also notable about today's revenue meeting is what isn't on the agenda: official "recognition" of two pots of money that are key to the budget picture. To avoid a complete calamity, lawmakers want to use $198 million from the state's rainy day fund and about $234 million from a tax-amnesty program.

But that money can't be incorporated into the budget until it's officially recognized, and no one wants to do that until there is agreement on how it will be used.

Tick, tock...

Elsewhere:

The House and Senate each come in at 9 a.m. to work through a huge stack bills from the opposite chamber, though few of the measures appear controversial.

In the House, members will take up Sen. Francis Thompson's bill to outlaw synthetic marijuana derivatives that are being sold in convenience stores under names like "K2" and "Voodoo." But there is little mystery over the outcome, as both the House and Senate already are on record in favor of similar legislation.

The only question at this point is which bill -- there are three -- ultimately becomes the law of the land with Gov. Bobby Jindal's signature.